He may be buying gilts like there’s no tomorrow today, but tomorrow he may have to raise rates (well not tomorrow, but some day..) he will have to be ready to raise rates quickly and sharply, BOE Governor King says.
Markets are skeptical that central bankers can thread the proverbial needle and ease quantitatively until the economy coughs back to life and then remove that accommodation before inflation takes flight. Kinds seeks to shore-up confidence that he is is up to the task.
Cable is well bid as London heads out the door, supported by a slide in EUR/GBP after inflation unexpectedly rose in the most recent data. Cable is at 1.4755, not far from 1.4775/80 highs posted earlier in the day. 1.4985, the February high is the key level above the market. Expect a world of barrier options at that level.